DOCSLIB.ORG

Drexel Burnham Lambert, Underwriting Fees, and Market Power

Total Page：16

File Type：pdf, Size：1020Kb

Download full-text PDF Read full-text
Drexel Burnham Lambert, Underwriting Fees, and Market Power DREXEL BURNHAM LAMBERT, UNDERWRITING FEES, AND MARKET POWER By GLENN R. WILLIAMS A DISSERTATION PRESENTED TO THE GRADUATE SCHOOL OF THE UNIVERSITY OF FLORIDA IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE DEGREE OF DOCTOR OF PHILOSOPHY UNIVERSITY OF FLORIDA 2004 Copyright 2004 by Glenn R. Williams This document is dedicated to my parents, Horace and Mildred Williams, and my sons, Benjamin, Daniel and Samuel Williams. ACKNOWLEDGMENTS Miles Livingston provided endless encouragement and direction in this endeavor. David Brown, Joel Houston, and Jay Ritter also provided helpful comments and suggestions. My fellow graduate students, especially Stas Nikolova and Rick Borghesi, provided invaluable insight and support. Seminar participants at Florida Atlantic University and the University of Central Florida also added helpful comments. iv TABLE OF CONTENTS page ACKNOWLEDGMENTS ................................................................................................. iv LIST OF TABLES............................................................................................................. vi LIST OF FIGURES .......................................................................................................... vii ABSTRACT..................................................................................................................... viii CHAPTER 1 BACKGROUND MATERIAL ....................................................................................1 Literature Review and Development of Testable Hypothesis ......................................3 Market Concentration............................................................................................4 Underwriting and Selling securities ......................................................................6 Junk Bonds ............................................................................................................8 A Summary of Our Findings from Previous Research..........................................9 Testable Hypothesis...............................................................................................9 History of the Junk Market: 1977-1990......................................................................11 Junk Bonds as a Different Market from Investment Grade Issues .............................13 Data......................................................................................................................14 Summary Statistics ..............................................................................................15 2 UNDERWRITING FEES...........................................................................................24 Theoretical Model.......................................................................................................24 Empirical Analysis......................................................................................................31 Regression Analysis....................................................................................................35 Underwriting Fees ...............................................................................................35 Treasury Spreads .................................................................................................39 3 COMMERCIAL BANK ENTRY...............................................................................53 4 CONCLUSION...........................................................................................................63 LIST OF REFERENCES...................................................................................................65 BIOGRAPHICAL SKETCH .............................................................................................68 v LIST OF TABLES Table page 1-1 Summary statistics for junk issues ...........................................................................18 1-2 Summary statistics for B-rated issues. .....................................................................19 1-3 Summary statistics for investment-grade issues.......................................................20 1-4 Summary statistics for A-rated issues ......................................................................21 1-5 OLS regression of underwriting spreads of junk bonds 1977-1999.........................22 1-6 OLS regression of underwriting spreads of investment-grade bonds ......................23 2-1 Market share of investment-grade underwriters 1977-1999. ...................................41 2-2 Market share of junk underwriters 1977-1999.........................................................42 2-3 Summary statistics for the junk bond market from 1977-1989................................43 2-4 Percent of total junk principal issued by the top 10 underwriters............................44 2-5 OLS regression of underwriting spreads for junk bonds..........................................45 2-6 OLS regression to determine difference between underwriter spread of the top underwriter and those of all other underwriters 1977-1989.....................................46 2-7 OLS regression of treasury spreads for junk bonds .................................................48 2-8 OLS regression to determine difference between treasury spreads of the top underwriter and those of all other underwriters 1977-1989.....................................49 3-1 Summary statistics: Investment vs. commercial banks............................................58 3-2 Commercial bank underwriters 1991-1999..............................................................59 3-3 Percent share of the major commercial bank junk bond underwriters 1991-1999...60 3-4 Regressions with commercial bank (CB) dummy for issues 1991-1999.................61 3-5 Regressions with commercial bank market share 1991-1999..................................62 vi LIST OF FIGURES Figure page 2-1 Median underwriter fees as a percent of principal issued. .......................................51 2-2 Median junk bond underwriter fees as a percent of principal 1977-1989................52 vii Abstract of Dissertation Presented to the Graduate School of the University of Florida in Partial Fulfillment of the Requirements for the Degree of Doctor of Philosophy DREXEL BURNHAM LAMBERT, UNDERWRITING FEES, AND MARKET POWER By Glenn R. Williams August 2004 Chair: Dr. Miles Livingston Major Department: Finance I examine the market for new issue bonds from 1977-1999 and show that underwriting fees in the 1980s junk bond market were higher due to the dominant position of Drexel Burnham Lambert. The market for underwriting junk was much more competitive following Drexel’s bankruptcy in 1990 and underwriting fees were lower. In contrast to other researchers, I do not find evidence of competitive pressures on underwriting fees from commercial banks entering the new issue junk bond market. viii CHAPTER 1 BACKGROUND MATERIAL Since 1977 we have seen the junk bond market reborn, grow to a multi-billion dollar business, endure scandal and the loss of its dominant underwriter, and finally mature into an accepted method for raising capital. More than a decade has passed since the junk bond market scandals and Drexel Burnham Lambert’s filing for bankruptcy in 1989--sufficient time to examine the legacy of the junk bond market and to make judgments about the workings of Michael Milken, Drexel Burnham Lambert and the market for newly issued junk bonds. There is a wealth of anecdotal evidence stating that the 1980s junk bond market was different (see Stewart (1992), Bruck (1989), and Stein (1992)). Most of this evidence points to the dominance of Michael Milken in creating and then controlling the market. Bruck (1989, page 57) reports the observation of a junk buyer after meeting with Milken in 1979: He had the issuers. He had the buyers. He had the most trading capital of any firm. He had the knowhow. He had the best incentive system for his people. He had the history of data--he knew the companies, he knew their trading prices, probably their trading prices going back at least to 1971. He had boxed the compass. The accusation has also been made that Milken had “captive clients.” That is, that he had a set of buyers ready and willing to buy whatever junk issues he made available to them. As Stewart (1992, page 54) reports: By early 1977, Milken’s operation controlled a remarkable 25% of the market in high-yield securities. It was really the only firm maintaining an active market- making operation with an eye toward enhancing the liquidity of the market.… So Milken became, in effect, the market for high-yield bonds. He had an incredible 1 2 memory, and he knew who owned what issues, what they had paid, their yield to maturity, and who else wanted them. Increasingly, his clients developed such confidence in his research and market acumen that when he urged them to invest in a particular issue, they did. Almost 30 years after issuing his first junk bond, Michael Milken continues to inspire heated debate and diverging opinions. As the Wall Street Journal editorialized: No doubt historians someday will set the record straight on Mr. Milken's contribution to the explosive economic growth experienced by the U.S. in the past 20 years. For now, he remains the most famous figure who became engulfed in the controversial securities prosecutions undertaken by then-U.S. attorney Rudolph Giuliani, based on information supplied by such economically immaterial figures as Ivan Boesky, Dennis Levine and Martin Siegel. (“Yes, Pardon Milken,” Wall Street Journal, December
Load more

Recommended publications
  • THE WALL STREET JOURNAL. © 1990 Dow Jones & Company, Inc
    THE WALL STREET JOURNAL. © 1990 Dow Jones & Company, Inc. All Rights Reserved. VOL CXXII NO. 66 WESTERN EDITION WEDNESDAY, APRIL 4, 1990 RIVERSIDE, CALIFORNIA 50 C E N T S By DAVID J. JEFFERSON originally set for $25 million, was to have been more attuned to the needs of small clients than is the Wall Street firms still generally neglect the Staff Reporter of THE WALL STREET JOURNAL co-managed by Drexel Burnham Lambert Inc. Wall Street. “The regionals are closer to the middle market. “The result is that we’ve had a Wall Street’s biggest investment bankers are But Drexel's parent, Drexel Burnham Lambert businesses that are doing the transactions, not wide-open field,” Mr. Greene says of the writhing after the collapse of junk bonds and Group Inc., filed for bankruptcy-law protection only geographically but also in temperament,” regionals. megamergers, but many regional investment Feb. 13 and has said it plans to liquidate its says Richard Himelfarb, executive vice president firms are on a roll. And that’s good news for assets. of Legg Mason Wood Walker Inc., a Baltimore Improving Staffs entrepreneurs who rely on the regionals to “We were able to go back to the client and concern that does transactions in the $10 million arrange and finance acquisitions and other say we’d like to continue to perform on this,” to $100 million range. Moreover, as Wall Street lays off investment strategic deals. Allen Weintraub, Advest's president, says. The top people at regional firms routinely bankers in droves, many of the regional firms are Not long ago, Wall Street investment bankers “That’s proof that things can be done regionally, pay personal attention to clients.
    [Show full text]
  • Drexel Burnham Lambert Archival Finding Aid
    MUSEUM OF AMERICAN FINANCE Drexel Burnham Lambert Archival Finding Aid Museum of American Finance 11/17/2014 Notable Subjects: Drexel Burnham Lambert, I.W. Burnham II, Frederick Joseph, Robert E. Linton, Michael Milken, investment banking, high yield bonds, junk bonds, bankruptcy. Historical Significance Drexel Burnham Lambert was a prominent Wall Street investment bank forced into bankruptcy in 1990. It was founded as a small brokerage firm, Burnham and Company, in 1935 by I.W. “Tubby” Burnham. In 1973 Burnham and Company merged with Drexel Firestone to form Drexel Burnham, and in 1976 it merged with the American arm of the Belgian firm George Bruxelles Lambert and was renamed Drexel Burnham Lambert. By the mid 1980’s DBL was ranked among Wall Street’s top investment banks, employing over 10,000 people. Its success was fueled by its creation of a market for first-issue junk bonds, allowing low-credit companies to raise capital by issuing bonds rather than having to offer their stock. In 1986 DBL came under investigation by the U.S. Securities and Exchange Commission involving insider trading and other illegal trading practices. Under extreme pressure from the government and a subsequent decline in DBL’s business, the company filed for bankruptcy in February of 1990. Scope and Content: The Drexel Burnham Lambert collection at the Museum of American Finance consists of internal company memoranda and correspondence; financial statements of the firm; consolidated income statements; info about profit sharing; info about health care and retirement benefits for employees; DBL Exposure, issues of a publication for employees; settlement with the SEC; Chapter 11 bankruptcy material; DBL Liquidating Trust material; journals and newspaper articles about DBL; DBL objects including banners, t-shirts, buttons, etc.
    [Show full text]
  • United States of America V. Ivan Boesky
    UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK ) UNITED STATES OF AMERICA, ) ) Plaintiff, ) ) v. ) ~-~8T~ CR 378 (MEL)­ ) IVAN F. BOESKY, , ) ) Defendant. ) --------------~--------------------) DEFENDANT' S SUPPLEMENTAL MEMORANDUM OF LAW IN SUPPORT OF MOTION FOR REDUCTION OF SENTENCE PURSUANT TO RULE 35(b) Ivan F. Boesky renews, and requests a prompt resolution of, his pending motion for reduction of sentence pursuant to Rule 35(b).!1 For the reasons set forth below and in the original Rule 35 Motion, Mr. Boesky requests that his sentence be reduced to the time he has served -- approximately twelve months. !I The motion was filed April 15, 1988, but Mr. Boesky requested the Court to defer action on the motion until at least October 1988 so that the fruits of Mr. Boesky's cooperation might become more apparent. See United States v. Ellenbogen, 390 F.2d 537, 543 (2d Cir.), cert. denied, 393 U.s. 918 (1968); United States v. Friedman, No. 86 Cr. 591 (MJL) (S.D.N.Y. Oct. 14, 1987) (1987 U.S. Dist. LEXIS 9276). I. THE PUBLIC BENEFITS FROM MR. BOESKY'S UNPRECEDENTED COOPERATION ARE NOW DRAMATICALLY CLEAR. The true fruits of Ivan Boesky's unsurpassed cooperation with the Government are now for the first time -- dramatically, fully, and publicly known. As the Court recognized at sentencing it was impossible for the public or the press to understand the incalculable value of Mr. Boesky's cooperation because the secrecy of the grand jury process precluded any public recitation of the value of the information that he had provided to the government.~/ Public "blood lust" was brought to bear on the sentencing procesS and could" not be effectively countered, at least in public, with the social and law enforcement benefits of early, thorough, and extensive cooperation.
    [Show full text]
  • Glass-Steagall: Lest We Forget
    Florida State University Law Review Volume 11 Issue 1 Article 5 Spring 1983 Glass-Steagall: Lest We Forget Lawrence F. Orbe III Follow this and additional works at: https://ir.law.fsu.edu/lr Part of the Banking and Finance Law Commons Recommended Citation Lawrence F. Orbe III, Glass-Steagall: Lest We Forget, 11 Fla. St. U. L. Rev. 163 (1983) . https://ir.law.fsu.edu/lr/vol11/iss1/5 This Comment is brought to you for free and open access by Scholarship Repository. It has been accepted for inclusion in Florida State University Law Review by an authorized editor of Scholarship Repository. For more information, please contact [email protected]. COMMENTS GLASS-STEAGALL: LEST WE FORGET* LAWRENCE F. ORBE III I. INTRODUCTION In response to the Great Depression, federal legislation was en- acted to separate commercial and investment banking. However, the gradual sophistication of the banking industry and the creation of a plethora of new financial services offered by banking institu- tions have blurred this statutorily mandated division. This com- ment will trace the history of this legislation and delineate the principle actors responsible for its formulation. Next, an analogy * For earlier discussions of the Banking Act of 1933 (Glass-Steagall Act) and related issues, see Beatty, What are the Legal Limits to the Expansion of National Bank Services? 86 BANKING L.J. 3 (1969); Beatty, The Incidental Powers of National Banks, 4 NAT'L BANKING REv. 263 (1967); Chase, The Emerging Financial Conglomerate: Liberalization of the Bank Holding Company Act, 60 GEO. L.J. 1225 (1972); Clark and Saunders, Glass- Steagall Revised: The Impact on Banks, Capital Markets, and the Small Investor, 97 BANKING L.J.
    [Show full text]
  • One of Wall Street's Most Recognized Experts Joins Trinity Financial Board
    Peter Grandich, Managing Member 219B Morris Avenue, Spring Lake, NJ 07762 [email protected] DATE: February 1, 2016 CONTACT: Peter Grandich 732-642-3992 [email protected] One of Wall Street’s Most Recognized Experts Joins Trinity Financial Board SPRING LAKE, NJ - Trinity Financial Sports & Entertainment Management Company, a division of Peter Grandich & Company, announced today that Guy Adami has joined the firm’s Corporate Advisory Board. “While he may not score points on the gridiron, in my opinion Guy Adami is one of the very few Wall Street experts who scores a touchdown whenever he speaks,” said Peter Grandich, founder and managing member of Trinity Financial. “In a sea full of highly biased and more-wrong- than-right investment advice, Guy Adami is a refreshing breeze of prudent, humble investment insight. I urge our clientele to make Guy’s commentary apart of their research.” Grandich explains that the purpose of Trinity Financial Advisory Board is to provide guidance to the firm’s unique niche clientele. Through their own life experiences, faith-filled advisory board members can help guide athletes and entertainers through many of the challenges that celebrity can often bring. Adami adds, “I’m truly honored that Peter Grandich feels I can assist his clientele. I’ve been a long-time admirer of Peter’s work and consider him a close, personal friend.” About Guy Adami: Guy is an original member of CNBC’s Fast Money. He is currently the Director of Advisor Advocacy at Private Advisor Group in Morristown, New Jersey. Private Advisor Group is comprised of a network of nearly 500 advisors with assets approaching $16B.
    [Show full text]
  • Insider Trading, SEC Decision-Making, and the Calculus of Investor Confidence Spencer Derek Klein
    Hofstra Law Review Volume 16 | Issue 3 Article 5 1988 Insider Trading, SEC Decision-Making, and the Calculus of Investor Confidence Spencer Derek Klein Follow this and additional works at: http://scholarlycommons.law.hofstra.edu/hlr Part of the Law Commons Recommended Citation Klein, Spencer Derek (1988) "Insider Trading, SEC Decision-Making, and the Calculus of Investor Confidence," Hofstra Law Review: Vol. 16: Iss. 3, Article 5. Available at: http://scholarlycommons.law.hofstra.edu/hlr/vol16/iss3/5 This document is brought to you for free and open access by Scholarly Commons at Hofstra Law. It has been accepted for inclusion in Hofstra Law Review by an authorized administrator of Scholarly Commons at Hofstra Law. For more information, please contact [email protected]. Klein: Insider Trading, SEC Decision-Making, and the Calculus of Investo NOTE INSIDER TRADING, SEC DECISION-MAKING, AND THE CALCULUS OF INVESTOR CONFIDENCE [T]he Commission and staff have long been proud of their work in carrying out Commission responsibilities. They know, more than anyone else, that disclosure to investors, detecting fraud and preventing it where possible, promoting fairness in the market- place, ensuring that those who handle other people's money ad- here to proper standards and give accurate and adequate accounts of their stewardship, and encouraging high standards of business conduct all combine to build public confidence in the nation's se- curities markets. Being able to provide continued confidence is the bulwark of the SEC's charter.' Securities and Exchange Commission Orientation Handbook [MIany falls from grace must be ignored by the legal system in an imperfect world.2 Professor Michael P.
    [Show full text]
  • Detecting and Quantifying Insider Trading and Stock Manipulation in Asian Markets∗
    Detecting and Quantifying Insider Trading and Stock Manipulation in Asian Markets∗ Gishan Dissanaike University of Cambridge Judge Business School Trumpington Street Cambridge CB2 1AG, UK [email protected] Kim-Hwa Lim University of Cambridge Judge Business School Trumpington Street Cambridge CB2 1AG, UK and Penang Institute 10 Brown Road 10350 Penang, Malaysia [email protected], [email protected] Abstract This paper focuses on insider trading, where the perpetrators exploit market sensitive information to earn profits or avoid losses. The paper’s objectives are as follows. First, we seek to examine whether we can detect possible insider trading and stock manipulation and react in almost real time, even though insider trading activity is intended to be evasive. Second, we also estimate the extent of il- licit profits (or loss avoidance) that might have been earned. Finally, we analyze, if detection is possible, the appropriate response for regulators and other market participants. We do not restrict our study to cases where corporate events have materialized, as we hope to capture insider trading surrounding market rumors and failed corporate events. Because insider trading is executed with the aim of being evasive and undetected, it is impossible to conclude with certainty. Nevertheless, using a hypothe- sized model based on how insiders and stock manipulators trade, we detect price patterns that are consistent with their objective to maximize profits and at the same time be evasive. 1. Introduction “Greed, for lack of a better word, is good.” —Gordon Gekko, the main antagonist of the 1987 film Wall Street The film mentioned in the epigraph revolves around insider trading and securities ma- nipulation by Gordon Gekko, a fictional character modeled loosely after Ivan Boesky and ∗ We are grateful to Donald Hanna, Naoyuki Yoshino, and Iikka Korhonen for their helpful comments.
    [Show full text]
  • A Transactional Genealogy of Scandal: from Michael Milken to Enron to Goldman Sachs
    University of Pennsylvania Carey Law School Penn Law: Legal Scholarship Repository Faculty Scholarship at Penn Law 2013 A Transactional Genealogy of Scandal: From Michael Milken to Enron to Goldman Sachs William W. Bratton University of Pennsylvania Carey Law School Adam J. Levitin Georgetown University Follow this and additional works at: https://scholarship.law.upenn.edu/faculty_scholarship Part of the Accounting Commons, Accounting Law Commons, Business Administration, Management, and Operations Commons, Business Law, Public Responsibility, and Ethics Commons, Business Organizations Law Commons, Corporate Finance Commons, Law and Economics Commons, and the Securities Law Commons Repository Citation Bratton, William W. and Levitin, Adam J., "A Transactional Genealogy of Scandal: From Michael Milken to Enron to Goldman Sachs" (2013). Faculty Scholarship at Penn Law. 1515. https://scholarship.law.upenn.edu/faculty_scholarship/1515 This Article is brought to you for free and open access by Penn Law: Legal Scholarship Repository. It has been accepted for inclusion in Faculty Scholarship at Penn Law by an authorized administrator of Penn Law: Legal Scholarship Repository. For more information, please contact [email protected]. A TRANSACTIONAL GENEALOGY OF SCANDAL: FROM MICHAEL MILKEN TO ENRON TO GOLDMAN SACHS WILLIAM W. BRATTON* ADAM J. LEVITIN† ABSTRACT Three scandals have reshaped business regulation over the past thirty years: the securities fraud prosecution of Michael Milken in 1988, the Enron implosion of 2001, and the Goldman Sachs “ABACUS” enforcement action of 2010. The scandals have always been seen as unrelated. This Article highlights a previously unnoticed transactional affinity tying these scandals together—a deal structure known as the synthetic collateralized debt obligation involving the use of a special purpose entity (“SPE”).
    [Show full text]
  • Requiem for a Market Maker: the Case of Drexel Burnham Lambert and Below-Investment-Grade Bonds* By
    Working Requiem for a Market Maker: The Case of Drexel Burnham Lambert and Below-lnvestment-Grade Bonds Paper Elijah Brewer III and William E. Jackson III Series Working Papers Series Issues in Financial Regulation Research Department Federal Reserve Bank of Chicago December 1997 (WP-97-25) FEDERAL RESERVE BANK OF CHICAGO Requiem for a Market Maker: The case of Drexel Burnham Lambert and Below-Investment-Grade Bonds* by Elijah Brewer III Research Department, 11th Floor 230 S. LaSalle Street Federal Reserve Bank of Chicago Chicago, Illinois 60604-1413 and William E. Jackson III Kenan-Flagler Business School Campus Box 3490 McColl Building University of North Carolina Chapel Hill, North Carolina 27599-3490 JEL Classification Numbers: Gl, G2, G21, G28, L8 [Please Do not Quote without permission from Authors] December 1997 ’We thank Jennifer Conrad, Jason Greene, Gail Greenfield, Anil K. Kashyap, George G. Kaufinan, Randall S. Kroszner, Richard McEnally, Kathryn Moran, Richard Rendleman, Clifford Smith, Henri Servaes, Daniel Sullivan, participants at UNC-Chapel Hill’s Finance Area Summer Seminar Series, Federal Reserve Banks of Atlanta and Chicago Seminar Series, and the Western Economics Association 1997 meetings, for valuable comments and suggestions. The research assistance of Jeffrey P. Ballou, Justin L. Brewer, Timothy M. Mumane, Peter Schneider, Budhiphol Suttiratana, and Nancy E. Waddington is greatly appreciated. The views expressed here are those of the authors and do not represent the Board of Governors of the Federal Reserve System or the Federal Reserve Bank of Chicago. Requiem for a Market Maker-. The Case of Drexel Burnham Lambert and Below- Investment-Grade Bonds ABSTRACT In this article we add to both the financial intermediation and market microstructure literature by examining the market reactions surrounding the withdrawal of a major financial intermediary and market maker from a specific securities market.
    [Show full text]
  • SEC News Digest, 01-10-1985
    ~est Issue 85-7 NOnCE OF COMMISSIONMEEl.aS Following is a schedule of Commission meetings which will be conducted pursuant to provisions of the Government in the Sunshine Act. In general, the eo.ission expects to follow a schedule of holding closed meetings on Tuesdays, and open meet- ings on Thursday morning. Meetings on Wednesday, and if necessary On Thursday afternoons, will be either open or closed according to the requirements of agenda iteme under consideration. The COmmission will not normally meet on MOndays or Fridays. Visitors are welcome at all open meetings, insofar as space is available. Meetings will be held in the Commission Meeting Room, Room 1C30, at the Commission's headquarters· building, 450 Fifth Street, N.W., Washington, DC. Persons wishing to photograph or videotape commission meetings must obtain permission in advance from the Secretary of the Commission. Persons wishing to tape record a Commission meeting should notify the Secretary's office 48 hours in advance of the meeting. CLOSED MEETING - TUESDAY, JANUARY 15, 1985 - 10:00 a.m. The subject matter of the January 15 closed meeting will be: Formal orders of inves- tigationr In~titution of administrative proceedings of an enforcement natureJ Settle- ment of administrative proceedings of an enforcement natureJ Institution of injunctive actionsJ Opinion. OPEN MEETING - TUESDAY, JANUARY 15, 1985 - 3:00 p.m. The subject matter of the January 15 open meeting will be: The commission will meet with representatives from the American Society of Corporate Secretaries to discuss matters of mutual interest including, among other things, bene- ficial ownership disclosure rules, tender offer regulation and shareholder ~unica- tions.
    [Show full text]
  • Toward a More Prosperous Future
    Toward a More Prosperous Future Goldman Sachs 2013 Global Macro Conference New York May 15, 2013 Michael Milken Chairman, The Milken Institute Milken Institute Global Conference • Finance • Industries • Regions • Education • Human Capital April 28 – May 1, 2013 • Philanthropy • Health www.milkeninstitute.org • Climate/Energy • Government • Media Milken Institute Global Conference • 165 panels • 620 speakers • 3,700 attendees www.milkeninstitute.org April 27 – 30, 2014 Investing in African Prosperity Tony Blair Bill Gates H.E. Paul Kagame Rhonda Zygocki Strive Masiyiwa Michael Milken Former Prime Minister Co-Chair and Trustee President Executive Vice Chairman and Founder, Chairman, Great Britain and Bill & Melinda Gates Republic of Rwanda President, Econet Wireless Milken Institute Northern Ireland Foundation Policy and Planning Chevron What is the most powerful force the world has ever produced? y=Cekt #4 – “Compound interest.” A=Pert a = Future Value P = Original Principal r = Rate t = Time Towards a More Prosperous Future • Things We Know for Sure • Things That Will Change the World Rate of Return Concerns How to Save $1-Million in 40 Years $25,000-a-year @ 0% $6,642-a-year @ 6% $1,304-a-year @ 12% (or a one-time investment of $10,747) Towards a More Prosperous Future • Things We Know for Sure • Things That Will Change the World Percent of Population Owning a Passport 100% 75% 75% 50% 25% 20% U.S. U.K. Sources: U.S. State Dept.; U.K. Parliament Expansion of balance sheets of major central banks Central bank total assets (% of GDP) 35 BoJ 30 ECB 25 BoE 20 Fed 15 10 5 0 Q1 2006 Q1 2007 Q1 2008 Q1 2009 Q1 2010 Q1 2011 Q1 2012 Source: Bloomberg.
    [Show full text]
  • 2013 ANNUAL REPORT Structuring for Success a MESSAGE from the NATIONAL BOARD CHAIR Structuring for Success
    2013 ANNUAL REPORT Structuring for Success A MESSAGE FROM THE NATIONAL BOARD CHAIR Structuring for Success Spark supporters, Every year is filled with unique challenges and opportunities and 2013 was no exception. Through the ebbs and flows of the year, the organization at both regional and national levels celebrated important growth milestones and began to structure for bigger changes in 2014 and a promising future. Most notable in 2013 was the transition of Spark’s co-founder from an active leadership role as the Chief Executive Officer, to a distinguished National Board Member. Chris Balme led Spark for nine years and grew the organization from serving a handful of students in the San Francisco Bay Area to serving more than 2,000 students nationwide. With the launch of each new region, Chris and his team created a positive, hard-working culture for growing staff, introduced new partners to a unique way of giving back and changed the trajectories of students’ lives. As we look toward a new era for Spark under equally visionary leadership, I am enthusiastic about our future. Jason Cascarino, Spark’s new Chief Executive Officer, will elevate our proven program model with national audiences and engage in the high school readiness policy discussion to ensure that workplace-based learning opportunities are an integral part of the plan to keep middle grades students on track for success in high school. I have tremendous gratitude for all of Spark’s volunteer mentors, teachers and school partners, generous donors and numerous other committed stakeholders. Our program would not be what it is today, and we would not have the potential for such a bright future under new leadership, without this tremendous support from so many.
    [Show full text]